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Himachal HC notice to Jai Ram govt on plea challenging tax-free salary to MLAs, ministers
HC issued notices to state government on plea challenging provisions of Himachal Pradesh Legislative Assembly Act, 1971, and Salaries & Allowances of Ministers Act, 2000, which exempt MLAs from income tax on their salaries
The High Court of Himachal Pradesh on Monday issued notices to the state government and all the respondents on a petition challenging the provisions of Himachal Pradesh Legislative Assembly (Allowances & Pension of Members) Act, 1971 and Salaries & Allowances of Ministers (Himachal Pradesh) Act, 2000, which exempt legislators and ministers from income tax on their salaries and allowances.
A division bench comprising Chief Justice Mohammad Rafiq and Justice Jyotsna Rewal Dua passed these orders on a civil writ petition filed by Yash Pal Rana, Suresh Kumar, Kapil Bhardwaj and Rakesh Kumar, who are practicing advocates in various courts of the state, under Article 226 of the Constitution of India.
The petitioners have prayed to the court to declare such provisions of the aforesaid Acts as unconstitutional and quash them besides state may be restrained from paying the income tax of ministers and members of the state assembly.
HP Vidhan Sabha, Mahender Singh of the BJP, Mukesh Agnihotri of Congress, CPIM’s Rakesh Singha and Independent legislator Hoshiar Singh have been made parties in the petition.
The Section 6AA of Himachal Pradesh Legislative Assembly (Allowances & Pension of Members) Act, 1971, says that the salary and compensatory, constituency, secretarial, postal facilities and telephone allowances payable to a member and other perquisites admissible to him, under this Act, shall be exclusive of the income tax which shall be payable by the state government.
Similar provisions have been made for the minister in Section 12 of the Salaries and Allowances of Ministers (Himachal Pradesh) Act, 2000.
Senior advocate Rajnish Manikatala said the submission of the petitioners is that the legislation with respect to the fixation and payment of income tax comes within the domain of the Parliament and 30 state legislatures have has no legislative competence to assume the responsibility of payment of the income tax on behalf of MLAs and ministers.
The Income Tax Act mandates the payment of income tax by the persons, who are assessable to income tax and the state cannot take over the payment of income tax on behalf of the MLAs and its ministers. The income tax is required to be paid by the MLAs or the minister concerned out of their own income.
They contend that under 246 of the Constitution of India, Parliament has exclusive power to make law with respect to the matters enumerated in List-1 of the 7th Schedule while the state legislature has exclusive powers to make laws in the matters falling in List-2.
Entry-82 in List-1 of Schedule-7 pertains to the taxes on income other than agricultural income. Accordingly, so far as the levy of taxes on income is concerned, it is the exclusive power of Parliament to legislate in the said field.
Besides, Articles 106, 186 and 195 provides for the salaries and allowances of the members of the two houses of the Parliament; speaker, deputy speaker, chairman and deputy chairman of either house; and salaries of members of legislative assemblies.
Clause 2 of subsection 14, section 10 and sub-section 17 of the Income Tax provides for the income of the members of parliament and the legislative assemblies which is not included in the total income.
The petitioner said that in accordance with the impugned acts, the State of Himachal Pradesh is paying the income tax of the MLAs and the ministers from the date of incorporation of the provisions in the concerned Acts.
Manikatala said they have also submitted the data procured under the Right to Information Act according to which the state government has paid a collective ₹4,69,31,047 ( ₹4.69 crore) income tax on the salaries, allowances and perquisites of the MLAs and ministers in three years (2017-18 to 2019-20). The petitioners alleged that the state is indulging in this luxury even at a time when the total loan liability of the government is ₹54,299 crore as of 2018-19.
There are only six states that have been bearing the burden of paying income tax for the legislators. These states are Madhya Pradesh, Chhattisgarh, Haryana, Uttarakhand, Punjab and Himachal Pradesh while Bihar discontinued the practice in 1998-99.
The petitioner contended that the state legislature has no legislative competence to enact the provisions contained in said legislation mandating the provisions of income tax contrary to the terms contained in the Income Tax Act and hence are unconstitutional and be set aside.
When the common man pays taxes from his own salary why should the government pay taxes on legislators’ salaries, the petitioners had contended, says counsel Rajnish Maniktala.
